7 Strategies to Negotiate In-Network Carve-Outs for Outpatient Spine

Outpatient spine is still almost entirely out-of-network, but a few payors are beginning to agree to reasonably priced in-network carve-outs. Merritt Healthcare, based in Somers, N.Y., successfully negotiated carve-outs for 16 spine procedures with a payor in Massachusetts. Matt Searles, a managing partner at Merritt, lists seven strategies for ambulatory surgery centers negotiating in-network carve-outs for spine.

1. Be ready for frustrations. Asking payors to consider a carve-out for spine can be "a very painful process," Mr. Searles says. Reaching out to payors on this matter involves a lot of work without much to show for it. But Mr. Searles keeps on slogging because he is convinced payors will eventually come around. "It's a work in progress," he says.

2. Show your setting is appropriate. Insurers will always note that spine procedures are not in the Medicare-approved list for outpatient surgery. "You have got to prove these procedures can be done safely outside of the hospital," Mr. Searles says. For a particular procedure, demonstrate that your spine patients do not have to be sent to the ED, that there were little or no overnight stays (which are possible in 23-hour facilities) and that the center's infection rate is lower than the hospital's.

3. Demonstrate efficiency. Payors also need to be persuaded that your center reflects the ASC industry's great reputation for efficiency. "Bombard the payor with data," Mr. Searles advises, "but don't be obnoxious, of course."

4. Show you have the right cost. Provide rich data on your centers' costs. Insurers will compare this information to their data from hospitals for the same procedure. Mr. Searles notes that some hospitals have very high costs for key items such as implants.

5. Benefit from other ASCs' offers. "It helps when other ASCs are also asking for in-network reimbursement for spine," Mr. Searles says. He notes that a request from another ASC company may have been a significant factor in the Massachusetts payor's decision to grant a carve-out. The fact that other ASCs are also championing outpatient spine can only strengthen your case.

6. Ask for feedback. When your request is rejected, it's helpful to know what the payor's reasoning was so that you can develop your argument, but getting any kind of explanation almost never happens. "We don't get a lot of feedback," Mr. Searles says. When payors reject such a request, they typically make a bland statement that reveals nothing, such as, "Our medical director has determined that, at this point in time, it is not advisable to include these procedures on our list of coverable outpatient procedures."

7. Be prepared for curve-balls. In a few cases, payors actually approve coverage of outpatient spinal codes but set rates too low to be affordable. "This defies logic," Mr. Searles says, with evident frustration. Getting the payor to acknowledge that spine surgery can be safely performed on an outpatient basis must mean something, but it is a Pyrrhic victory if the rate is too low to use. Still, the ASC can later try to negotiate higher rates, as Merritt successfully did with some codes that the Massachusetts payor initially set too low.